Five Things To Know Before Pitching Your Business Ideas To Potential Investors #2

Whether it’s to potential buyers or to investors and banks to raise funds for the new business start-up, all business owners need to be able to pitch. In the first year, pitching may seem to entail a brilliant, creative business concept with the potential to make millions, but the truth is very different.

When it comes to funding new companies, serious business investors are looking for realistic business plans and ideas.

If you have a great business idea, it’ll be easier to raise money for your start-up to make sure you have a killer pitch to match. Some tips for pitching your business idea to investors are here.

Build an elevator pitch

Make sure that the business idea can be summed up in a way that is easy to understand. Imagine explaining the organization for 30 seconds, then summarizing what it does, why it exists, and what’s special about it. If business investors do not easily grasp your business concept, then they will not be assured that it will be obtained by your clients either. In just 30 seconds, practice speaking about your idea. You can then build on the why, what and how of your business concept if asked.

Show experience with small business ideas

When pitching your business concept, real-world experience combined with a competent management team is likely to inspire investor confidence. With two significant confidence-building data, back up all the parts of your idea.

Company evidence: proof of cash flow; a consumer track record; testimonials and any market research you have done. Investors are likely to finance a business which has proof of its ability to trade.

Display your expertize: show that with an experienced management team that understands the industry and has experience operating or working in comparable organizations, the company is in capable hands. Skills such as accounting, marketing, sales and activities, if you have one, are important to demonstrate in your CV or that of your team.

Demonstrate practical forecasts

As a get-rich-quick scheme, do not pitch your business idea. Sensitive investors won’t have faith in optimistic multi-million-pound sales and profit estimates that can be delivered. Instead, show reasonable growth in sales and provide three potential outcomes: worst case, medium or planned case, and revenue best case. Ensure that you have proof for your estimates, such as industry statistics and analysis of rivals, and clearly describe the assumptions that you have made in arriving at your revenue forecasts.

Maintain low start-up expenses

When attempting to raise funds for a business venture, don’t get carried away by unrealistic prices. Wise investors are searching for a new company that has an overall emphasis on cost management and a close leash on prices. For example, avoid giving yourself a large salary and keep capital expenditure to a minimum, buy affordable PCs instead of the latest models with expensive features you don’t really need. In marketing and operating budgets, be sure to build in a financial buffer, but otherwise keep the costs as low as possible.

Crawl prior to running

It is appealing to would-be investors to prove that you can supply the products. Show that you can manufacture on a smaller scale first, or that you can offer your services to a limited number of frequent clients, before attempting to secure funds for a large operation. Success creates confidence, and if you have proven that you can deliver, then you are more likely to obtain funding to further develop your company.

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